Private Label Buyer

Private label industry people to watch in 2012

March 28, 2012

These people have big PL challenges ahead

PLBuyer editors believe these 10 people will face major challenges and/or have major impacts in the private label world during the coming year.
Each was sent questions to answer for this outlook. Short descriptions of those who responded start below, followed by their answers. To read their complete responses, go to Descriptions of what the remainder of our top 10 face follow.
Carla Cooper, president and CEO at private label sourcing, marketing and product design giant Daymon Worldwide, will face the 2012 challenge of continuing to transform the company to a wider array of services to retailers, as she notes in her responses to PLBuyer questions. Cooper became president of Daymon at the start of 2011, bringing a wide range of experience from the consumer packaged goods arena at such companies as Quaker, Coca-Cola, Procter & Gamble, and Kellogg. It will be interesting to see how she uses that CPG view of the supermarket to advance private label.
Mike DeJulio is director of corporate brands at Price Chopper, Schenectady, N.Y.  He’s been with Price Chopper for more than 35 years and has held numerous merchandising and operational positions.  Price Chopper has been moving upscale with its private label, rolling out Central Market Classics Decadent Desserts, a private label cake line, in August. How well it does could point the way for others trying to diversify their private label.
Sam Mayberry, vice president, private brands, at Supervalu will have the job of overseeing Supervalu’s move from a variety of banner brands to its over-arching Essential Everyday line, while the Minnesota-based retailer tries to right itself from years of financial and operational issues.
Joe McKie, vice president of private brands at the Food Marketing Institute and a veteran of Winn-Dixie’s private label efforts, took on his new private label focused position at FMI in 2011. It will be interesting to see how he increases FMI’s involvement in private label as the trade group tries to broaden its focus in light of the changing nature, and the changing players, in food retailing.
The 2012 challenge for Kevin Broe, vice president of own brands at The Great Atlantic & Pacific Tea Co. (A&P), is to continue growing the troubled retailers’ private label while the company emerges from bankruptcy. Broe brings more than 26 years of retailing experience, including a stint as a Supervalu vice president for sales & merchandising, own brands. A&P has been doing some interesting local sourcing, such as working with local restaurants and sourcing meats from local farms, for its private label.
A&P in early November reached a deal with outside investors that should allow it to emerge from bankruptcy as a privately held company sometime early in 2012.
Delhaize America executives have been vocal in stating they want to dramatically increase their U.S. private label penetration rates. Accomplishing that in 2012 will fall to Tim Jacques, vice president, private brands. Jacques started working for Hannaford Bros., now a Delhaize banner, in 1989 as a category manager  and worked his way up to director of private brand, center store & product merchandising, at Hannaford from 2004 until January 2010, according to his LinkedIn profile. “Tim has an incredibly sharp mind for the business and is adept at building efficient, highly functioning organizations,” a LinkedIn recommendation from a Hannaford colleague states. He’ll need exactly that next year and beyond to achieve Delhaize’s 36 percent PL penetration rate in the States.
Trey Johnson was named senior vice president of food at Family Dollar in February, 2011, charged with helping the discount retailer further develop its food strategy. Private label consumables hit 16 percent of Family Dollar’s sales in its latest quarter, according to an October 14, 2011 earnings call. That signified a 26 percent increase in a year. Johnson will need to keep that growth going in an increasingly competitive marketplace that’s seeing competitor Dollar General, and others, also step up their private label games. Family Dollar intends to launch several new private labels in 2012 and also will increase its PL marketing and merchandising.
Johnson joined Family Dollar from Sears Holdings where he had created a food offering for Kmart.
Ric Jurgens, chairman, president and CEO of Iowa-based Hy-Vee, took a very public role in 2011 in supporting the front-of-package nutrition labeling system jointly developed by the Food Marketing Institute, where he was serving as chairman at the time, and the Grocery Manufacturers Association. He’s since committed Hy-Vee to redesign all its private label packaging to include the new system, despite the possibility that government regulators could mandate something completely different. Hy-Vee expects to spend $3.5 million to add Nutrition Keys front-of-package labeling icons to its 4,400 private label SKUs. Jurgens is betting big on the voluntary system. The coming year will tell if that was a good or bad bet.
As president and CEO at Supervalu banner Save-A-Lot, Santiago Roces will be leading the planned Save-A-Lot expansion into the country’s so-called food deserts, generally under-served, lower-income, urban areas. But he won’t be alone; a host of others from Walmart to Walgreens also are expanding into those markets. Roces will have to position Save-A-Lot and its predominately private label product selection to stand out from a suddenly crowded competitive environment. Roces certainly has the background to do that, having served as senior vice president, small formats, at Walmart Stores USA, in addition to holding other positions at the world’s largest retailer. Roces took over the top spot at Save-A-Lot in May 2011.
Regina Tator became director of private brands at Sunbury, Pa.-based Weis Markets in September after serving the chain as director of center store. In her PL post, she’ll be responsible for the company’s more than 6,300 private label items. Weis faces the same challenges other regional players do, but it did well in its last reporting period, scoring a 4.1 percent increase in net income to $17 million for its quarter ending Sept. 24, 2011.  Tator’s challenge will be to position private label products for still cautious shoppers while also deciding whether or when to pass on rising wholesale costs. Weis reported it absorbed “a significant portion” of those costs in its most recent quarter.

Our top four gaze into the crystal ball

PLBuyer: What will be the most significant trend in private label in 2012?
Cooper: Economic volatility will remain the most significant macro trend impacting private label. The difference in 2012 is that, despite the still rocky economy, consumers have evolved in how they think about private label. They no longer look at just price, but expect private label to deliver on both value and quality. There will also be industry specific trends to watch, such as ongoing retailer consolidation, and the growth and appeal of alternative channels such as mass and value. 
DeJulio: Value. As food inflation progresses into 2012, offering the consumer great quality products they can trust at the right price will continue to be critical. Consumers will maintain their frugality and will continue to look for ways to stretch their dollar; being loyal to the retailers whom they feel are the most helpful in enabling them and their families to enjoy their lives to the fullest. Through our quality-driven, multi-tiered corporate brand strategy, innovative and differentiated products, promotional strategies, display-based merchandising, value-tier opening price points, and strong ties to the community; corporate brands at Price Chopper will continue to be key in being helpful to our customers.
Mayberry: We believe our consumers will continue to pursue value-oriented, quality products that fit in perfectly with private label products and our challenge will be keeping products fresh and exciting while delivering costs that will meet our customers stretched food budgets.
McKie: The move beyond creating a national brand equivalent, and rather, producing and marketing robust private label products that are of the highest quality, relevant to the consumer and have a positive point of difference. Labels that connect emotionally with consumers and team members will build stronger brand equity, and to do this, brand owners will leverage consumer insights in order to develop effective marketing plans across target customers.
PLBuyer: What is the major challenge you face in your job regarding private label in 2012 and what is the greatest opportunity?
Cooper: My major challenge will be to lead Daymon in finding new opportunities to grow profitable business for our customers and partners. We are working collaboratively with our retailer partners on developing consumer-centric strategies that let them respond to the needs of their customers, while continuing to differentiate, maintain profitability and build a competitive advantage. One of our greatest opportunities will stem from the global growth and acceptance of private label. With a growing middle class in many emerging markets, we are applying our private label expertise to help retailers build programs in both mature and emerging markets.
DeJulio: Commodity pressure and food inflation. There are not many other threats which are of more concern then the cost of goods to our customers. 
Mayberry: Our challenge is to continue the growth in private label sales that we have experienced over the past two years, in light of growing competition from national brand companies who are fighting to grow their market share. The winners will be our shoppers who will see better products at a great value from both national brand companies and Supervalu. 
McKie: Our industry is moving away from the “fast follower” brand model to providing the safest, most nutritious, highest quality, innovative and most relevant products.
Importantly, we still have the potential to grow. In order to capture this potential, we need to shift the relationship between retailers and private label manufacturers from transactional to more of a partnership. In my experience, a retailer’s brand often outsells any other brand across categories sold in its stores, so this is our opportunity to move to the front of the line and lead, not follow.
PLBuyer: How did you become a part of the world of private label?
Cooper: I joined the world of private label in 2009 when I was named to the board of directors for Daymon Worldwide. The more I learned about Daymon, the more passionate I became about being involved in the business. When Milt Sender, Daymon’s founder and chairman, tapped me during the search for a new president and CEO, I jumped at the chance. 
DeJulio: My background in category management/procurement is extensive and includes the focus areas of dairy, frozen food and candy sales. Most recently, I was the director of health & beauty care at Price Chopper, responsible for department sales and merchandising. 
Mayberry: My move into private label has been a natural progression in a career that has spanned retail, buying and merchandising responsibilities. My very first part-time job in the grocery industry was unloading produce for an independent grocery chain in central Illinois where we unloaded watermelon trucks at each store. While in college I obtained an internship with the General Grocers Company in Bloomington, Ill. where I worked in the advertising department, and later as a buyer/merchandiser. I was hooked and have enjoyed the grocery industry and all its opportunities for over 30 years.
McKie: I began my career working in supermarkets. From carrying out groceries, to stocking shelves to running a cash register, I thoroughly enjoyed every aspect of the business. There were two people I worked for early in my career who taught me what I needed to know to become a merchant. Their passion for our business was contagious, and I was inspired to be a part of this dynamic grocery industry. Then, as a store director I was recruited by Spartan Stores to become one of its inaugural private label merchandisers, and ultimately I earned responsibility for the entire program. I have been involved in the retail industry and private label over the course of my career, and today, I view my role at the Food Marketing Institute as a way to give back to our industry. I hope to provide a platform on which to build collaboration amongst our trading partners and, as a result, build brands.